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Conflicts of interest between consultants and the pension plans they assist can be costly to employees saving for retirement, according to a new report from the Government Accountability Office.

The report comes two years after the Securities and Exchange Commission performed a review of 24 pension consultants and found that 11 had disclosed conflicts of interest and 13 had undisclosed conflicts of interest. The GAO report finds that the defined-benefit plans using those 13 consultants had annual returns that were 1.3 percent lower than the others. Although the new finding is “suggestive,” it shouldn’t be considered proof that consultant conflicts cause lower rates of return, according to the report.

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The 13 consultants with undisclosed conflicts advised plans worth more than $4.5 trillion in assets. A worker with 30 years of service could see his retirement funds reduced by nearly 30 percent, according to a statement by Democratic representatives Edward J. Markey and George Miller of Massachusetts and California, respectively.

“When it comes to the management of pension funds and workers’ hard-earned savings, investment decisions should be driven by thorough analysis and research,” said Markey, “not by the pursuit of fees that pad profit margins of consultants to the detriment of fund beneficiaries.”

A conflict of interest could occur if a consultant who advises pension fund plan sponsors on their plan’s long-term goals has a competing financial interest. Such conflicts have been blamed for the failure of certain defined-benefit plans — such as those of United Airlines, for example.

Money managers, broker-dealers, or pension consultants can have conflicts when business relationships — especially among themselves — may lead them to breaching their fiduciary duties, according to the report. Money managers, for instance, might make more in fees by steering investments in initial public offerings to the advisers’ more well-heeled clients.

In the case of pension consultants, the SEC found in its study that 10 of the advisers who didn’t disclose their conflicts sold money managers analytical software packages that they use to help boost the performance of clients’ holdings. That creates a conflict for consultants because they might be prone to advising pension plans to use the money managers that buy the software “because those business relationships are profitable for the consultant,” according to the GAO.

“We can’t allow the challenge of saving for retirement to be made even more difficult by pension consultants who choose to enrich themselves,” said Miller.

Although the GAO report is “suggestive” of a link between conflicts of interest and negative pension returns, it says the findings did not prove direct causality. It recommends that such regulators as the SEC, the Pension Benefit Guaranty Corp., and the Employee Benefits Security Administration (EBSA) work more closely together to uncover undisclosed conflicts of interest. Miller, chairman of the House Committee on Education and Labor, is preparing legislation to combat conflicts of interest that affect defined-benefit and 401(k) plans.

In a letter that accompanied the GAO report, Bradford Campbell, acting assistant secretary of the EBSA, said his agency would soon publish a new regulation requiring service vendors, including pension consultants, to disclose fees along with direct and indirect compensation information.

The fate of the traditional defined-benefit plan has looked bleak for some time. The number of DB plans shrunk from 58,000 to 29,000 between 1995 and 2005, according to the American Benefits Council.

That shrinkage has an upside, however: because of the sharp decline, the surviving DB plans have recently appeared healthier. A recent survey by Milliman, an actuarial consultancy, found that pension funds saw returns of 12.8 percent in 2006, beating expectations by more than 4 percent.